your current location is：Home > Finance > NewsletterHomeNewsletter

On August 29, Huazhu Group released its financial performance report for the second quarter and first half of 2022. The report shows that with the domestic epidemic under effective control since late May 2022, Huazhu's RevPAR (Revenue Available to Rent) has begun to rebound, recovering to 86% of the 2019 level in June 2022, and 2022 It increased further to 90% in July.

At the end of the second quarter, Huazhu Group had 8,176 hotels in operation, a year-on-year increase of 15%; the overall revenue in the second quarter was RMB 34 billion, a year-on-year decrease of 5.7% and a quarter-on-quarter increase of 26.1%. The loss further narrowed, and the overall performance was in line with market expectations. Huazhu's overseas business continued to pick up, DH business had a good momentum of development, and RevPAR increased month by month.

Resist the challenge of uncertainty and build the ability to pass through the cycle

In April and May, the epidemic situation in many places across the country was severe again, the wine and tourism industry was hit hard again, and business performance declined. Huazhu actively responded and strengthened its lean growth strategy. It adjusted and optimized from multiple dimensions such as cost control, organizational upgrade, and brand development to form an overall synergistic effect and build the ability to go through cycles.

On the one hand, Huazhu actively cooperated with the government to fight the epidemic, ensured the safety of employees and guests, and assumed the responsibility of requisitioning hotels; 60 million yuan in rent reduction.

The combination of the epidemic factor and the complex external environment has brought many uncertain challenges to the operation of the hotel industry. Huazhu anchored the lean growth strategy unchanged, adhered to long-termism, and sought certainty in the uncertainty.

Set up six regional companies to treat China as the world

Against the background of the vigorous development of the county economy in China and the solid promotion of high-quality development, Huazhu Group is still full of confidence in the prospects of the Chinese market, and adheres to the overall development goal of "doing China as the world".

According to the financial report data, as of June 30, Huazhu China has 8,051 hotels in operation, accounting for more than 98%. Huazhu’s pace of sinking into the third and fourth lines has been steadily expanding. The number of Huazhu hotels in low-tier cities accounted for 37% and 56% of operating hotels and pipeline hotels, respectively. 58% of the 561 hotels newly signed in the second quarter were from lower-tier cities, showing a strong market explosiveness.

At the same time, in order to be closer to the local market and achieve localized management, Huazhu actively adjusted its organizational structure, formally established six regional companies, and adjusted its economical and mid-range brands from the previous management model dominated by the brand division to a The management model dominated by six regions creates greater value for franchisees and customers in an efficient, flexible and precise way.

Accelerate the layout of new leisure business, and enter the harvest period for mid-to-high-end brands

With the upgrade of consumption in the Chinese market and the arrival of the new middle-class dividend era, the mid-to-high-end hotel segment has ushered in a new opportunity for reshuffle, and Huazhu Group's forward-looking advantages in the mid-to-high-end hotel market have gradually become prominent. According to the financial report, as of the end of June, mid-to-high-end brands had 445 hotels and 229 pipeline hotels in China, and mid-to-high-end brands are now gradually entering the harvest period.

According to the development direction of tourism and leisure in the new period planned in the "Outline of National Tourism and Leisure Development (2022-2030)" jointly issued by the National Development and Reform Commission and the Ministry of Culture and Tourism, leisure tourism has become one of the lifestyles of the new generation of consumers, accelerating the layout The new format of leisure tourism has also become one of the competitive barriers for leading hotels.

Manxin, a mid-to-high-end personalized design hotel brand under Huazhu Group, fully integrates localized features into customer experience, and has opened its 100th hotel in the second quarter; the boutique resort hotel brand Huajiantang and its subordinate hotels with cultural characteristics as the core The Huajian series of brands are also striving to expand the development path of the high-end leisure and vacation market; at the same time, the Meilun brand, which is positioned in the flop market, is also actively exploring flop opportunities in the market to create more possibilities in the mid-to-high-end hotel market.

Photo: Manxin's 100th store, Manxin Hotel, Suzhou Street, Zhongguancun, Beijing

Photo: Huajiantang new store

Photo: The newly opened Qingdao West Coast City Balcony Meilun Hotel

In addition, in terms of brand development, Huazhu will focus on the high-quality expansion route, and will no longer develop soft brands in the economic sector in the future, and will accelerate its exit from the economic soft brand market within one to two years to increase the concentration of high-quality brands, thereby enhancing the hotel industry. Overall hotel quality in the network.

Overseas markets continue to pick up DH's outstanding performance in the second quarter

Since the beginning of this year, with the turn of the epidemic prevention and control situation in Europe, the further liberalization of the tourism market, the continuous release of leisure demand and the previously squeezed business demand, the DH business has gradually improved. The financial report shows that DH's RevPAR recovery shows a monthly upward trend. In the second quarter, RevPAR increased by 233.3% year-on-year. In May this year, it has recovered to 99% of 2019, and in July, it has exceeded 2019 and reached 103%.

In addition to the demand growth factor, Huazhu Group has also strengthened the cost control and organizational improvement of DH. Especially in the digital transformation of DH and the establishment of the membership system, Huazhu replicated and built the entire digital capability in DH, reshaped the management process through digital means, continuously optimized operating costs, and further improved efficiency and quality.

The positive signals released by the financial report show that the overall business of Huazhu Group has maintained an upward trend. With the increasing popularity of the leisure tourism market, the hotel industry still has a deep room for profit exploration. By optimizing the layout, it will increase the supply of high-quality hotel service products and organizational momentum. The improvement of Huazhu's growth in the next stage can be expected.